5.1.E. SR 09-10-2007 - Laserfiche WebLink

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REQUEST FOR ACTION To Item Number Ci Council 5.1.E. Agenda Section Meeting Date Prepared by Worksession September 10, 2007 Tim Simon, Finance Director & Bruce A. West, Fire Chief Item Description Reviewed by Elk River Fire Relief Association Pension Contribution Options Lori ohnson, Ci Administrator Reviewed by Action Requested Council approval fox 2008 budget funding of voluntary contribution to Elk River Fire Relief Association Background/Discussion In previous budget work sessions the Council indicated that they would like to see a plan for determining the voluntary contribution to the Elk River Fire Relief Association. Over the past couple of weeks the Relief Association has been preparing some different options for the Council to consider for the 2008 budget. Bruce West, Fire Chief and Tim Simon, Finance Director will be in attendance at the work session to go over in detail the various options. Below is a summary of the various options for the Council to consider: 1) Use a percent of the State Fire Aid for the future contribution amount. Fire Aid is derived primarily from two percent tax on insurance premiums and distributed based on market values and population of the various fire districts. 2) Remain with the 3% increase. 3) Use a core group of cities and take the average of the core group to determine the amount for the following year. 4) Keep an amount such as $30,000 as the voluntary contribution and it shall be reviewed by the council on a periodic basis. The Relief Association also considered linking amount to the funding ratio, but concerns existed that this might create a situation where a lower funding ratio would require a higher City contribution when the Relief Association strives to meet the 100% funding level. As an additional item, the Relief Association would fund an actuarial study (independent third party) of the defined benefit pension plan to address Council concerns referencing the long term ability to fund future benefit levels. The cost of the study is approximately $2,500 and the findings will be presented to the City Council prior to the 2009 benefit level approval. The Relief Association will also consider an actuarial study on a periodic basis in future years. S:\Council\Bruce\2007\Relief Association Contributions.doc